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Insurance Coverage for Unauthorized Immigrants Under Current Law and Proposed Health Care Legislation

September 23, 2009

Yesterday CBO released a letter responding to a request by the Ranking Member of the Senate Committee on Finance for additional information about health insurance coverage among nonelderly unauthorized immigrants under current law and under proposals being considered in the Senate and the House.

Current Law

Estimates of the unauthorized immigrant population residing in the United States are derived from survey data that identify foreign-born individuals but do not specify their legal status. As a result, CBO and the staff of the Joint Committee on Taxation (JCT) must use statistical methods to impute legal status when modeling the effects of proposals affecting health insurance coverage. Although the best available information is used in that process, the data have substantial limitations, and the estimates described in CBOs letter are subject to a significant amount of uncertainty.

Under current law, CBO projects that the nonelderly unauthorized immigrant population will total about 14 million in 2019. Of those individuals, nearly 60 percent (about 8 million) will be uninsured. A further 25 percent (about 4 million) will have employment-based coverage, and about 7 percent (1 million) will have some alternative form of insurance (other than Medicaid). The remaining 10 percent (about 1 million) will make use of some Medicaid coverage, reflecting the current law that allows unauthorized immigrantswho are not eligible for full Medicaid benefitsto receive limited Medicaid coverage for emergency care if they would be eligible for the program apart from their unauthorized status. The number using Medicaid may also include some unauthorized immigrants who manage to obtain full Medicaid coverage even though they do not qualify for it; however, we believe that state agencies administering the Medicaid program successfully screen out most ineligible individuals.

Proposed Legislation

Under the proposal put forth by Senator Baucus-the Chairmans mark for proposed health care legislation released by the Committee on Finance on September 16 (the Americas Healthy Future Act of 2009)- unauthorized immigrants would not be eligible to participate in the new insurance exchanges or receive refundable tax credits for health insurance coverage; that proposal indicates that the verification process might be similar to what is required under current law for Medicaid. The effect of those provisions would depend on the legislative language that is drafted to reflect those specifications and the rules that are ultimately developed to enforce them. More stringent enforcement procedures would increase the likelihood that unauthorized immigrants could not obtain insurance or subsidies through the exchanges, but they could also discourage eligible individuals from seeking coverage. More rigorous methods would thus reduce subsidy costs; they would also increase administrative costs to some extent. For the people who would not obtain insurance under more stringent rules, the amount of medical care they would receive and the source of financing for that care are difficult to predict.

CBO and JCT have completed a preliminary analysis of specifications for the Chairmans mark that were provided by committee staff, rather than the Chairmans mark itself. Moreover, we have not reviewed legislative language that would specify the policies involved and their enforcement provisions. In the absence of such language, we assumed that enforcement mechanisms would be in place that would be highly effective at keeping ineligible individuals from receiving tax credits. However, we have also assumed that there would be some noncomplianceresulting from misreporting of income, family circumstances, or other qualifying conditions to obtain more generous subsidies. Illegal participation by unauthorized immigrants would fall into this category. We have no basis for quantifying those factors separately for this or other proposals.

The same conclusion applies to H.R. 3200, the Americas Affordable Health Choices Act of 2009, as it was introduced in the House in July 2009. That bill also indicated that unauthorized immigrants would not be eligible to receive premium and cost-sharing credits for health insurance coverage. As was the case with Senator Baucuss proposal, our preliminary analysis of H.R. 3200 took into account a variety of factors that would affect compliance with its requirements, but again, CBO cannot provide a specific figure for coverage of unauthorized immigrants under that proposal.